EU trade policy ends up with new tariffs on Scotch whisky

The World Trade Organisation is body designed to lower tariffs and enforce the common global rules on trade to the benefit of consumers. It is a blow when after long and careful deliberation and investigation it feels it has to make a judgement which entails another country imposing tariffs on a trading counterparty. That is what happened this week thanks to the behaviour of Airbus and the EU.

The WTO found that Airbus had received subsidies that broke the rules of fair trade, which in turn had cost Boeing sales of planes. They therefore have allowed the USA to impose tariffs on goods up to a value of $7.5bn which reflects their calculation of the amount of sales damage done to the US company. The USA has decided to impose a 10% tariff on Airbus planes, which will hit future sales. The UK makes the wings for these products.

The USA has also chosen some high profile food and drink products from EU countries for a 25% tariff. This includes Scotch whisky, which is particularly unwelcome. It is a reminder that the EU which makes us impose high tariffs on food and drink from non EU parts of the world can through its wider policies end up costing us exports in these same areas as countries impose retaliatory tariffs.

None of this is helpful at a time of manufacturing downturn. There is already an intense tariff based trade spat between the USA and China. The refusal of the EU to lower its high 10% tariff against non EU cars is also a continuing sore with the USA which charges only one quarter of that level on EU cars. The danger is this WTO judgement will take us closer to a broad based trade war between the USA and the EU, just as we have seen develop with the USA and China.

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

That might be true but I would advise caution over the amount of goodwill Mr Trump will extend to the UK-he is out to get those who have sought to undermine him- not just the US “deep state” itself but it’s associates in Ukraine(as you have seen just recently) and London.

The decision would have affected the UK parts of Airbus regardless of whether we are in the EU or not. What I find disconcerting is that the EU is happy to give companies like Ford and JLR money to move their operations to places like Turkey and Slovenia thereby destroying jobs and job creation in the UK.

The hit on Scotch Whisky is somewhat offset by falls in Sterling. They will of course have to equally contend that with the Scottish Law regarding the minimum pricing of alcohol which I am sure will equally hit sales.

I am glad for the USA and President Trump. He is doing his job in defending his country and their industries. I await similar here.

The FAA has never allowed companies to police themselves or self-certify their aircraft. With strict FAA oversight, delegation extends the rigor of the FAA certification process to other recognized professionals, thereby multiplying the technical expertise focused on assuring an aircraft meets FAA regulations.

No word from you on the “sanity of EU regulations” on vehicle emissions yet

I think Hannan is correct, the EU want the UK trapped as an uncompetitive trade colony.

Traitor Mayhab and co. thought it was the best way to return to the EU after short term punishment to get us to think correctly.

RoI do not want their beef market ruined by the U.K. leaving the EU, plus a bit of historical spite thrown in.

The best response from the UK public is to stop buying RoI products and anything from the EU. Look for alternatives especially away from RoI, German or French products. Do not support those who seek to economically hurt us. The answer is in your wallet.

If I were you, Hope, I would get used to the idea that you will be “Eating Crow” post Brexit. You won’t be able to afford prime Irish Beef post a “no-deal” Brexit, any more than you can afford it now I suspect.

You forget the food mountains held in car manufacturers warehouses during the 1980s- while Geldoff was singing save the world- because of over production through EU subsidies to help eaters EU and the French. More market for UK farmers to take up. UK Diary herds to expand again instead of Eastern European imports.

If you added the tariff onto a portion of EU Irish beef it would add under a pound to its cost.
I reckon Hope would be able to afford it.
Or Hope might choose some lovely Welsh Lamb, Scottish salmon or English pork fillets.

Wrong the Faroe Isles did NOT buy Scottish Salmon Fishing Co which is a company registered in Channel Islands and listed on the London Exchange . A Faroe Islands company owns some shares in it but the biggest shareholder is a Swiss company

( not sure why my previous post on this failed moderation as its an easily checkable fact)

“The best response from the UK public is to stop buying RoI products and anything from the EU. Look for alternatives especially away from RoI, German or French products. Do not support those who seek to economically hurt us. The answer is in your wallet.”

Daniel Kawczynski MP ought to put his case to challenge the surrender bill to crowd funding. Do it through Guido website for a link like the lad who challenged the biased unfit for purpose Election Commission. I am willing to make a contribution.

Indeed – and the predictable rubbishing of British proposals this week, by Brussels, is the final proof that we would be beyond stupid to entrust any aspect of our future to a group of people who clearly hate us.

Absolutely not!! When I feel the Scots are supportive of the rest of the UK and particularly England I might just change my mind. I had 15 years of hateful remarks when living in Scotland and I have had a belly full of Scotland. If they get their independence – good.

Indeed. All the negotiation on Brexit and the China/US trade battle are a reminder of just how much governments damage trade and get in the way of business and productivity.

The BBC’s Question Time and Any Questions are still keeping up the circa 4 to 1 pro EU to pro Brexit rule I see.

Just why do they keep having Jeanette Winterson on? She never says anything sensible, thinks money grows trees and interrupts endlessly anyone who does say anything sensible or coherent.

Much the same can be said of the dire Bonnie ‘Ireland owes this country nothing’ Greer. Did we not help bail them out with huge soft loans quite recently? Also the softly spoke Barry Gardener with his desire to confiscate (and tax to death private schools) and “ask” those who can to pay more tax so Labour can piss it down the drain. ‘Ask’ with the threat of prison if you say no that is.

Taxing private schools will clearly raise far less than it would cost to educate those pushed back on the state. It would also destroy many excellent schools. I went to a decent northern state grammar school and they have already been largely destroyed (many by Thatcher) other than in Kent and a few other places. With Labour you can spend your money on alcohol, Ferraris, prostitutes, betting on the horses but not on educating your son or daughter to be a doctor or top engineer! Will they ban tutors and the buying extra books for children too?

Certainly tutoring must be banned under Labour. Apart from anything else tutors are not ‘qualified’ – ie they have not been through the political indoctrination of teacher training. They are private, unregulated and profit making, and their services give an ‘unfair’ advantage to their customers. What could possibly be worse to the collectivist eye?! Really they ought to move on further in this logical progression and stop parents giving an ‘unfair’ advantage to their own children, for example by teaching them to read write, basic maths etc. Or maybe even by seeking to provide them with better than average food and clothing? This is after all is where communist societies ended up in the past.

Any students who like the idea of earning a bit extra by tutoring should think very hard before they vote Labour.

The Universities Minister promises:- “ I’ll stop universities selling false hope”, well is it not the government and the tax payer funded soft loans that drive this duff degree lunacy? He goes on to accuse Chancellors of “promoting degrees lacking academic rigour”. Well as 50% of students have 3Ds or lower at A level they would have to lack rigour or they would nearly all fail and that would not be good for the universities income stream and the Chancellors salary, bonuses and pensions would it.

Good to see the local authorities are spending our money wisely. £137k Labour Council Chief suspended on full pay for six years is finally sacked. With some further nice pay off and a gold pension one assumes. Better get some more motorist muggers out on the streets to find some cash to cover all this. 600,000 parking, bus lane or box junction fines should cover it all after the muggers labour costs too! A gigantic parasitic job creation scheme.

We pay heavily for the EU’s protectionism, little of which benefits the UK.

The EU wants to be a (maybe, ‘the dominant’) superpower, so they are going to come into conflict with the US at some point. Would the EU use their superpower wisely and benevolently? I seriously doubt it.

There isn’t the faintest of hopes of the EU becoming any sort of superpower;it is just another rambling,dysfunctional sprawl like the Holy Roman Empire or the Polish-Lithuanian Commonwealth-and like those two will probably end up being partitioned between the real Great Powers even if it retains some outward form.

I am not a big fan of Gove, after he idiotically inflicted May on the nation and cost me my Boris bet (the first time that is). Plus he even suggested killing private schools with VAT like Labour. But I read:- Gove criticised after ‘comparing Bexit to fall of the Berlin wall’ except he did not do this at all.

Anyway there would have been some validity to the comparison had he actually made it.

Given the EU is already member of the World trade organisation, and have to abide by their rules, why are our Remainer politicians and the EU so against the UK trading under such terms with them when we leave.
Why are we even trying to strike/negotiate our own complicated tailormade deals with the EU, when a ready made solution is already on the table, that both the UK and the EU trade under with other Countries which are outside the EU.
The WTO as can be seen, have their own arbitration system in place already to ensure fair play, which also as I understand, covers fishing rights.

It is interesting to see how Brexit divided people so viscerally. I generally agree with Richard Dawkins on almost everything, I have read (or listened to) almost all of his excellent and often very funny books. True he is a bit taken in by the climate alarmist exaggeration religion (he is not after all a physicist or engineer) but over Brexit, just like Prof. A C Grayling, he has clearly gone totally potty (in the Spectator this week).

It is primarly a question of:- Do you want to live in a real democracy or in regions of an anti-democratic, suffocating, socialist superstate run by dire, one size fits all, bureaucrats with endless corruption and croney capitalism everywhere.

I’d rather the latter with good EU order straight bananas CAP payments and holidays / retirement in the sun all topped off with EU health protection..junker is retiring soon so then who you’re going to complain about next..stupid fellow- and what’s democracy got to do with anything? You think you have democracy in Britain? What about the unelected HoL 800 of them then the Royal family and endless thousands of civilservants none of them elected. Come to think of it how many in the country percentage wise put Boris into the top job..so back to the drawing board about democracy its only a facade a sop to throw at the ignorant classes to keep them in their place..and yes I chose the latter

While not being a heavy drinker, I do occasionally enjoy the odd scotch…..but not scottish whisky. Japanese whisky. It’s superior, and comes from an ally nation. I stopped buying scottish products at the same time as I did Irish and EU products.

You say the lobbing of a 25% tariff on Scotch is unhelpful, I say it’s a lesson in irony for Ms Sturgeon, but no doubt she’ll blame the English Tories.

I’m off into town this morning, and will make a special point of buying something american.

Say BMW have a plant in the US, as they do, but argue that it isn’t very profitable, because the lions share of their profit margin comes from design etc, “intellectual property”, done in Germany. How will that play in turn with the EU trying to slap taxes on Amazon, Apple and Google?

The German cars exported from the USA to China have apparently fallen foul of China’s spat with the USA on Tarriffs. Angela asked for special consideration for Germany’s cars but then upsets China by interfering in Hong Kong.

My book will make Michael Parkinson famous for living in the same village as me. It will make Arthur Scargill famous for working in the same pit as me and living in the same town as me. My book helps people like them and the late Lord Mason. Been in his house. It was okay.

My understanding is that the new tariff applies to single malts, apparently not to blended whiskies. This mitigates the impact a little. A tariff of 10% on vehicles would be very damaging to JLR. The USA is a key market especially for the recently announced new Defender which is assembled in Slovakia.

could be used to help enforce UK controls on exports across the land border from Northern Ireland into the Irish Republic in order to assist the EU in protecting the integrity of the EU Single Market while keeping that border as open as it is now.”

Or, UK controls on exports across the sea border between Great Britain and Northern Ireland, if Boris Johnson insists on applying the controls in the wrong place.

It was entirely predictable that the EU would sacrifice the Scotch Whisky industry.
**********
GilesB
Posted March 30, 2019 at 6:40 pm | Permalink
Great speech. Well done!

The indicative vote process on Monday is expected to lead to a majority for a permanent Customs Union. This must be resisted. We cannot give access to our market with no reciprocity. Nor can we allow the EU to accept on our behalf a massive tariff on say Scotch Whisky.

But that would definitely have been raised in advance as a possibility with the EU negotiators. Indeed I would expect EU negotiators to have made a suggestion.

However there are wheels within wheels. On this occasion, I suspect that unidentifiable actors within the UK government may have asked for this tariff on Scotch whilst the UK remains in the UK. You can work out why.

But for sure this wasn’t an arbitrary choice by the US. You’d have to be extremely naive to think that

They may well John, but your reply is premised on what I say about the US’s relationship with WTO and its motives not being the case.

My point is that the US – thanks to its own regulatory ineptitude – is now highly motivated to disadvantage Airbus re Boeing, and I am suggesting that the WTO has been sympathetic towards those objectives rather than impartial.

The losers in this will be passengers, who will likely be exposed to continuing loss of air safety, rather than to have the US fully clean up its act, I think.

Reply Try reading the WTYO judgement which is well researched and evidenced and which does not agree with all parts of the US case

Also dont you find it worrying that it was US certification officials that uncovered German car manufacturers falsification of emissions data and not the fantabulous rules and regulations of the wondrous ( peace be upon them) EU ?

The EU are rule breakers and we’ve all known this for a very long time. You only need to look at the record of dodgy behaviour of some of the leaders of that organisation and its offshoots

Boeing have also received subsidies in all but name via sales of military versions of their airliners. Boeing might not have launched their first jet airliner, the 707, had in not been for massive sales of military C-135 transports and KC-135 tankers, over 800 in all. These sales enabled the company to sell the airliner at a far lower price than would otherwise have been possible. Incidentally the KC-135 remains in service after over 6o years.

Even more important that we escape the clutches of the EU. Unfortunately the traitors within government and the remain voting elites would rather have our country dragged into this to try and prove that they, in some perverted way, were right to vote remain.

International trade seems to be fraught with problems. Shame we are not self sufficient in food, energy and goods production. We could be if only we could ever get a government with different ideas. The only things we should import are raw marriage not found here and food that won’t grow here.

So long as Trump is in situ we will have chaos- and so long as Boris/ Cummings is in situ we will have double chaos. But with progress towards pending impeachment in the US and maybe a vote of no confidence in Govt here things might change dramatically- in a short while- we can only hope.

These other things about trade discrepancies can and should be discussed and sorted by reasonable people at WTO and other relevant venues – alas ‘reasonable’ and decency are qualities sadly missing in today’s political discourse- it seems populism rules for the moment- am afraid.

Yes. Try to read neutral trade experts opinions, rather than the bizarre anti EU, pro Trump nonsense from brexit cultists on here.
Trump is blocking the WTO court of appeal from appointing judges, meaning the WTO will not be able to confirm EU compliance so could maintain tariffs as long as they like.
Good luck with your WTO brexit. Trump is paralysing it. Absolute insanity to rely on it with Brexit.

This is ridiculous Project Fear.
The UK is certainly not going to stop trading into Europe.
So are you really claiming all European companies will “abandon” their customers in the UK after we leave?
Really?
Are you?

The EU has dutifully removed its 10% tariff on Japanese cars in return for the Japanese removing tariffs on largely French and Italian exports of wine and cheese. This of course deliberately compromises Japanese-owned UK car production, and continues a 40 year process of hollowing out the UK.

Your remainer correspondents might wish to try to defend this behaviour against an EU member which is the second largest contributor to their club.

I suspect that it fell under some secret agreement that since triggering Art 50 the U.K. would not exercise any influence in the EU on issues that would endure after we have left. A foolish Agreement made absurd by the subsequent extensions!

In fairness I think that it only came into force 59 days before March 29th 2019.

It’s just another example of the treachery of May’s remainers administration

After all the project fear that got the willing support of the BBC who was happy to publicise every hair brained Remainer claim, I note there has been almost complete silence about the punitive tariffs we are going to suffer on Scotch whiskey because of our membership of the EU. Odd that, unsubstantiated Remainer hysteria gets the full headline treatment, factual events that shows the downsides of our EU membership, nothing, nada, zilch. Isn’t it wonderful having an impartial national broadcaster?

I think it best that our trading arrangements around the World are governed by the needs of the UK and it’s 65 million people. Being part of a large political bloc means getting caught by the actions of that bloc. In trade you need flexibility in product , conditions etc., something you lose when combined with the needs of 27 other nations. Advantageous trade is governed by the quality of the product, price and delivery not by the illusion of political clout due to size. We need to do two things. get out of the EU as promised and revitalise the quality of people in government via a general election.

I guess you will not mind when Airbus relocate its operations in the UK, its 14,000 jobs and the £6bn it spends directly in the British economy somewhere else on the continent after your hard Brexit.

Building wings in Broughton before shipping them to Toulouse was always a daft idea. Simpler and cheaper to build everything in Toulouse.

By the way, you know of course that the EU slapped 25% tariffs on US exports of bourbon in retaliation of the steel tariffs President Trump slapped on steel exports from companies such as British Steel ?

British steel was apparently a threat to US national security which I find really weird.

Oh you mean following the City all moving to Frankfurt as you predicted too ?

Anyhow just so you know

LONDON (Reuters) – European satellite company Eutelsat and aerospace group Airbus have signed a multi-million pound deal to build components of two new communication satellites in Britain.

The agreement between Eutelsat and Airbus will see key parts of the new satellites, including the platform structure, propulsion system and antennas, manufactured at Airbus facilities in Stevenage and Portsmouth.

That fact you think its simple and easy to just up and build advanced aircraft wings anywhere shows how little knowledge you posses . The systems embedded in the wings are a specialty of UK manufacture following decades of experience

Yet against all your Project Fear predictions, in the last three years we have seen decent growth, lower unemployment, record numbers in work, pay rising, inward investment growing and the stock exchange doing well.

There is always worry of a general recession defined by a excess oof supply.

Personally I feel much of this has been averted by reducing production in China, but the car industry is clearly in over supply and the US applying the same tariffs to EU produced cars is a likely solution to this.

Hopefully we will be free of the EU, then it will be a simple trade of UK market share for free US market access.

Only 26 days of the this ridiculous charade left to play out!
Surely the EU won’t accept us having the audacity to request any concessions. They can muster up all of their courage and tell us they have had enough with the pathetic and futile extensions and let us go to work out our own future.
Independence Day please

Stop blathering, Andy, and just tell us one thing:
why should we wish to remain shackled to your EU masters failing scheme with all its negative connotations? Or are you so infatuated that you don’t recognise that there are negative connotations?

This is an interesting an important topic because it shows the minefield Brexiters face under their beloved WTO rules.

When does the government ‘buying British’ break the rules of fair trade and become an illegal subsidy? It is not always black and white. We know how much Brexiters love to complain about EU state aid rules. Imagine your shock when you learn WTO rules – which you want us to sign up to – include something very similar.

It is also worth noting that although the WTO has ruled against the EU and Airbus it is still investigating the US and Boeing – and will rule on that in the coming months.

Remember those heady days before 2016 when trade just happened and you didn’t have to worry about it? Not now. Trump and Brexit are why you are getting poorer.

It is an attempt by WTO to stop trading blocs from exploiting their power and from nations subsidising their virtually nationalised industries with back door grants and subsidies.
China and France are at the centre of this.
Costing the UK and USA billions.
Proper free fair trade is what is best.
The EU is a protectionist bloc and tries to stop free trade.

So we are all being punished because of CAP subsidies, primarily designed to benefit the French. The EU is a French racket and the Common Airbus Policy, in which our share was undervalued by a so-called Investment bank, is just another manifestation of this.

British Summer Fruits, the industry body that represents 95% of berries supplied to UK supermarkets Since May last year, almost £320m worth of raspberries were sold in the UK with shoppers spending 16% more on the classically British berry than in the previous year. In the last four weeks alone, the volume of raspberries available in stores has grown by 20%.

I want to draw your attention to recent remarks by Michel Barnier. He said that the EU must have customs checks at its borders. If Northern Ireland stays part of the United Kingdom and therefore has a border with the Republic, the EU will insist on the Republic imposing checks and tariffs on its imports from Northern Ireland.

The Republic believes – or pretends to believe – that this might lead to the break up of the Good Friday Agreement. This is why the EU is giving full support to the Republic’s aim of taking over the North. This is why the EU and the Republic keep referring to ‘the island of Ireland’ as if it were a nation in the making. It is not; it is a geographical area and nothing else. In fudging this issue, the Good Friday Agreement has been unhelpful to Unionists. This is why when people threaten the end of the Good Friday Agreement, I say “Go ahead. Make my day.”

The Good Friday Agreement is already in its death throes. Sinn Fein haven’t shared government at Stormont for over two years and etc Ed

And in 8 months the case against Boeing will be completed and the Eu will be allowed to impose sanctions against the US by the WTO, this does not solve anything and needs to be sorted out , before these this happen

The French and German Governments each have a 20% share in Airbus so the subsidies are not surprising. Once construction of the present generation of planes is complete, we should disentangle ourselves from Airbus and build our own unsubsidised civil aircraft. We should ask America to change its ‘Buy American’ policy to ‘Buy American or British’ in exchange for guaranteeing no subsidies. In negotiating a free trade deal with America, we too have a shopping list. If the Americans want to slap anti-subsidy tariffs on Airbus products, let them – so much the better for us.

I am afraid you have lost the plot here.
Tariffs of any sort is an hinderance to free world trade and therefore less prosperity, thinking that tariffs on the rest of Europe will not hurt us is rather naive

Do you not know that your beloved EU imposes massive tariffs on non members

dear oh dear

About John Redwood

John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.